OMB Report: sequestration would cut Homeless Assistance by $156 million

written by Steve Berg

September 21, 2012

For some time now, we have been telling you about big federal budgetary issues, and how these issues could affect efforts to end homelessness. A recent report to Congress by the White House Office of Management and Budget (OMB), requested by Congress in the Sequestration Transparency Act of 2012, is a reminder of the impact these issues can have.

We’ve already told you about “sequestration,” the across-the-board spending cuts scheduled to take effect in three and a half months under the Budget Control Act that Congress passed and the President signed into law in early 2011.

Now, a recent report to Congress by the White House Office of Management and Budget (OMB), has spelled out, for the first time, which programs in the federal budget will be exempt from sequestration, and how much funding each nonexempt program will lose in January.

According to the report, sequestration would cut the HUD Homeless Assistance line by $156 million, with HUD deciding how much of this cut would come from the Emergency Solutions Grants, and how much from the Continuum of Care. Either way, existing programs would need to be scaled back or shut down.

Our funding analysis shows that these programs need approximately $2.1 billion in FY 2013 appropriations to remain funded at their current level. If homeless assistance is funded at the Continuing Resolution amount, which is already insufficient, and then cut by $156 million under sequestration, we would end up with funding at $1.757 billion, a shortfall of 16 percent.

The local impacts of that shortfall are not hard to calculate. Just take the amount necessary to renew your existing Continuum of Care project or ESG grant, and subtract 16 percent. The effect such a dramatic cut in spending would have on our efforts to address homelessness would be grim and profound.

Sequestration was never meant to be good policy; it was designed to be so bad that Congress and the Administration would have no choice but to work together to find a better way to reduce the deficit. So far that hasn’t happened.

If Congress is going to address the deficit now, it should use a balanced approach that takes account of the severe cuts in spending that have already taken place in the “domestic discretionary” category. HUD programs and other programs like Health Care for the Homeless, SAMHSA programs that help homeless people with disabilities (and many others) have already been cut too much.

Congress created the sequestration rule, so it has the power to reverse it and replace it with something else. If it decides that the economy is too fragile for a big deficit reduction effort now, it doesn’t have to replace it with anything at all.

Members of congress already face a lot of pressure from critics of the policy, so odds are decent that congress may put some other plan in its place. The question is whether Congress will replace it with a policy that is better or worse for the most impoverished Americans.

What is needed is a realistic policy that properly funds the federal role in protecting the most vulnerable Americans, housing people who can’t afford even the most minimally decent housing, and helping people without jobs get employment.